Here’s how to object to income-related costs for Medicare premiums – Community News
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Here’s how to object to income-related costs for Medicare premiums

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Some older Americans may be all too familiar with sticker shock when it comes to their Medicare premiums.

That is, instead of paying the standard premium for Part B (outpatient coverage) and Part D (prescription drug coverage), their income is high enough to put in monthly “income-related adjustment amounts,” or IRMAAs. However, the surcharge is usually based on their tax return from two years earlier – which may not accurately reflect their current financial situation.

“For some clients, their income from two years ago is significantly higher than it is now or will be when they retire,” said Elizabeth Gavino, founder of Lewin & Gavino and an independent broker and general agent for Medicare plans.

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The good news for those beneficiaries is that they can appeal to the IRMAAs.

“Most people don’t want to wait two years for their lower incomes to catch up with them to downgrade or remove the IRMAA,” said Danielle Roberts, co-founder of insurance company Boomer Benefits.

Of Medicare’s 63.3 million beneficiaries, about 7% — 4.4 million people — pay those monthly fees, according to the Centers for Medicare & Medicaid Services. This is due to several changes in the law over the years that forced higher earners to pay a larger portion of Medicare’s costs.

The reason a tax return from two years earlier is used is that it is usually the most recent one available when the Social Security Administration makes the IRMAA determination before each new year.

For this year, IRMAAs go into effect for individuals if your adjusted adjusted gross income is over $88,000 (details for 2022 have not yet been formally announced). For married couples filing joint tax returns, the allowances will start above $176,000 this year. The allowances increase with higher income limits.

The standard monthly Part B premium this year is $148.50, which is what most Medicare beneficiaries pay. (Part A, which provides hospital coverage, usually comes at no premium.) Higher earners’ allowance this year ranges from $59.40 to $356.40, depending on income. That results in monthly premiums ranging from $207.90 to $504.90.

For Part D, the fees this year range from $12.30 to $77.10. That’s in addition to the premium you pay, either through a standalone prescription drug plan or through a Medicare Advantage Plan, which typically includes Part D coverage. While premiums vary for prescription coverage, the average for 2021 is about $33.

The process of proving that your current income is lower involves asking the Social Security Administration to reconsider their assessment. You must complete a form and provide supporting documents.

“The best way to appeal is to submit your form with as much evidence as possible,” Roberts said.

The best way to appeal is to submit your form with as much evidence as possible.

Danielle Roberts

Co-founder of Boomer Benefits

Appropriate evidence may include a more recent tax return (if available), a letter from your former employer stating that you have retired, more recent pay stubs, or the like showing that your income has declined.

The required form includes a list of “life-changing” events that qualify as reasons for reducing or eliminating the IRMAAs, including marriage, death of a spouse, divorce, loss of retirement, or the fact that you have stopped working or working your hours. reduced.

If it does not work, you can appeal the decision to an administrative court, although the process can take some time and you would continue to pay those surcharges in the meantime.

In addition, your situation is re-evaluated every year, which means that the IRMAAs (or whether you pay them) can change annually, depending on how volatile your income is.